Contents -- Foreword -- Acknowledgments -- Acronyms and Abbreviations -- Chapter 1: From Vicious to Virtuous Circles -- Poverty as a multidimensional and dynamic concept -- The twin disappointments: Destiny or choice? -- The link from growth and development to income-poverty reduction -- Closing the virtuous circle: The link from poverty to growth -- Global convergence clubs -- Does poverty matter for growth? -- Regional convergence clubs -- Household-level poverty traps -- Implications of the report -- Pro-growth poverty reduction -- Notes -- Chapter 2: Dimensions of Well-Being, Channels to Growth -- Income poverty -- Beyond income and consumption -- Why not just ask them? -- Snapshots vs. movies: Life-cycle welfare, mobility, and risk -- Intergenerational mobility -- Conclusion -- Annex 2A: Estimating the monetary value of mortality changes -- Annex 2B: A tractable welfare measure that captures income, mobility, and risk -- Annex 2C: Intergenerational mobility in Latin America: Country comparison -- Notes -- Chapter 3: How Did We Get Here? -- Per capita income in Latin America: A long-run comparative perspective -- Long-run inequality -- Notes -- Chapter 4: The Relative Roles of Growth and Inequality for Poverty Reduction -- The relative roles of growth and income distribution for poverty reduction -- Growth and inequality: Bringing country specificity into the picture -- Concluding remarks -- Annex 4A: Testing for lognormality of income -- Notes -- Chapter 5: Pro-Poor Growth in Latin America -- Are all pro-growth policies equally pro-poor? -- Does the composition of growth matter? -- The role of taxes and transfers in reducing income inequality -- Concluding remarks -- Annex 5A: Simulating the impact of pro-growth policies on poverty -- Notes -- Chapter 6: Does Poverty Matter for Growth? -- A poverty-traps view of the development process.

Empirical evidence on poverty traps -- What is the empirical evidence on poverty's impact on growth? -- Transmissions channels from poverty to growth? -- Concluding remarks -- Annex 6A -- Notes -- Chapter 7: Subnational Dimensions of Growth and Poverty -- What is spatial inequality, how is it measured, and what are the regional trends? -- Identifying spatial concentration -- Why do we observe regional convergence clubs? -- Does migration work as an equilibrating mechanism? -- The link back to growth and policy issues -- Conclusions -- Notes -- Chapter 8: Microdeterminants of Incomes: Labor Markets, Poverty, and Traps? -- The distribution of earnings: The role of worker endowments and labor markets -- Microdrivers of changes in the income distribution -- Determinants of income dynamics: Lessons from rural El Salvador -- Implications for policies -- Annex 8A: Data and methodological details -- Notes -- Chapter 9: Breaking the Cycle of Underinvestment in Human Capital in Latin America -- The educational transition in the region: Slow and unbalanced progress -- Poverty and human capital: A two-way relationship -- Human capital formation: Sources of underinvestment traps -- The educational ladder in Latin America: A persisting educational divide -- Liquidity constraints, family factors, and educational investments: A sneak preview -- The private value of schooling: How much does it pay? To whom? -- Short-term or long-term poverty: Which is more pressing for schooling investments? -- Implications for human capital formation policies -- Investing now: The demographic window of opportunity -- Annex 9A: Data and methodological details -- Notes -- Bibliography -- Index -- Boxes -- Chapter 2 -- 2.1 Income poverty lines -- 2.2 National accounts and household surveys-based growth: How different are they?.

2.3 Inflation inequality: What really happened to LAC poverty and inequality -- 2.4 Mobility and poverty traps -- 2.5 Is it inequality or risk? Maybe Latin America has less inequality than we thought -- 2.6 . . . Or maybe more: Inequality and demographics -- Chapter 4 -- 4.1 Decomposing poverty into growth and income distribution effects -- 4.2 The size distribution of income -- 4.3 Total growth elasticities of poverty and the efficiency of growth -- Chapter 5 -- 5.1 Trade policy and income risk -- 5.2 Taxes, transfers, and inequality -- 5.3 Conditional cash transfers in Colombia -- Chapter 6 -- 6.1 Education and technology -- 6.2 Is Latin America different? -- Chapter 7 -- 7.1 Tools to detect spatial association -- 7.2 Will trade liberalization increase regional disparities? NAFTA and Mexico -- 7.3 Trade-offs in regional policy: The Spanish experience -- 7.4 Rural roads and poverty reduction in El Salvador -- Figures -- Chapter 1 -- 1.1 Per capita income relative to the OECD, 1870-2000 -- 1.2 Gini coefficient for Latin America, 1950-2000 -- 1.3 Poverty rates in Latin America, 1950-2000 -- 1.4 Low educational traps persist across generations among the poor and excluded -- 1.5 Although they stand to gain the most from education, poor people actually have low returns -- 1.6 Gini coefficients for market and disposable incomes -- 1.7 Indicators for poor and rich countries -- 1.8 Convergence clubs in life expectancy throughout the world -- 1.9 Poverty and investment throughout the world -- 1.10 Regional income dynamics in Brazil: The persistence of two convergence clubs -- 1.11 The sharp educational divide between the poor and the rich in Latin America -- 1.12 Total tax revenue versus per capita income, throughout the world -- Chapter 2 -- 2.1 Poverty in selected Latin American countries -- 2.2 The evolution of Latin American poverty during the 1990s.

2.3 Gini coefficient for Latin America, 1950-2000 -- 2.4 Income poverty profile for Bolivia: Self-rated by head of household versus data driven -- 2.5 Elasticity of son's income relative to father's income -- 2.6 Mobility indicators -- Chapter 3 -- 3.1 Per capita GDP for eight major Latin American countries, 1850-2000 -- 3.2 Per capita growth and initial income levels in eight major Latin American countries -- 3.3 Cross-country dispersion of per capita GDP in Latin America, 1870-2000 -- 3.4 Aggregate per capita income in Latin America, 1850-2000 -- 3.5 Per capita income of five groups relative to the United States, 1850-2000 -- 3.6 Incomes in Spain and peripheral Europe relative to OECD countries -- 3.7 GDP per capita in Latin America relative to several country groupings, 1850-2000 -- 3.8 Latin American per capita GDP relative to Western Europe, 1500-2001 -- 3.9 Income inequality in the United States and Spain, 1910-90 -- 3.10 Income inequality in the United Kingdom and France, 1910-90 -- Chapter 4 -- 4.1 Growth, inequality, and poverty reduction throughout the world -- 4.2 Decomposition of poverty into growth and distribution effect -- 4.3 Share of changes in poverty explained by growth and inequality -- 4.4 Share of changes in Latin American poverty explained by growth and inequality -- 4.5 Empirical and theoretical quintiles -- 4.6 Iso-poverty curves for headcount poverty -- 4.7 Mapping Latin American countries in the income inequality space -- Chapter 5 -- 5.1 Policies, growth, distributional change, and poverty reduction -- 5.2 Incidence of public spending in Latin America -- 5.3 Enrollment rates for secondary education relative to per capita GDP, for selected Latin American countries -- 5.4 Institutions and per capita income levels -- 5.5 Rural and urban headcount poverty rates -- 5.6 Potential spillovers between rural and nonrural GDP.

5.7 Relative labor intensity per sector -- 5.8 Poverty changes and labor-intensive growth throughout the world -- 5.9 The impact of public transfers on income inequality -- 5.10 Gini coefficient in selected countries before and after taxes and transfers -- 5.11 Total tax revenue versus per capita income, throughout the world -- 5.12 Social protection spending mix in Latin America -- 5.13 Impact of social insurance and social assistance programs on inequality -- 5.14 Incremental tax rate needed to halve poverty in 10 years -- Chapter 6 -- 6.1 Traditional view of the growth-poverty relationship -- 6.2 Poverty-traps view of the growth-poverty relationship -- 6.3 Multiple equilibriums in the presence of increasing returns to scale -- 6.4 Interest rate spreads in Latin America, 2003 -- 6.5 Growth in developed (OECD) and developing countries, 1963-2000 -- 6.6 Income in Latin America relative to the OECD countries, 1960-2002 -- 6.7 Histograms for per capita income, 1960s versus the 1990s -- 6.8 Histograms for per capita income in Latin America, 1960s versus the 1990s -- 6.9 Twin peaks -- 6.10 Equilibrium and distribution in 1999 -- 6.11 Latin American states: One peak? -- 6.12 Convergence clubs in life expectancy -- 6.13 Income, poverty and investment -- Chapter 7 -- 7.1 Variation in regional poverty rates in Latin America -- 7.2 Income dynamics and space in Brazil -- 7.3 Income dynamics and space in Brazil at the municipal level -- 7.4 Income dynamics and space in Chile -- 7.5 Income dynamics and space in Mexico -- 7.6 The distribution of municipal incomes and life expectancy in Brazilian municipalities -- 7.7 Social indicators in Mexico, by period -- 7.8 Poverty rates versus poverty densities in Brazil -- Chapter 8 -- 8.1 Productivity and wages go hand in hand -- 8.2 Earnings gap between the formal and informal sectors in Bolivia, 2002.

8.3 Transitions between the formal and informal sectors, and between salaried employment and self-employment in Mexico, 1987-2001.